Consumer Price Index Drops 06.% in June

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The consumer price index in Israel dropped by 0.6% in June. This drop was not expected and was caused by a decline of 11% in the price of fruits and vegetables and a reduction of 6.2% in the cost of clothing. The price of furniture and home goods dropped by 0.6%. This drop brings the total inflation in Israel since the beginning of the year to 0.9% and for the last 12 months to 0.8%. Both number below the very minimum 1% inflation rate that the bank of Israel wanted. The expectation is this very low inflation number or more correctly this months deflation number makes the expected rise in interest rates unlikely.

While the consumer price index has not risen, the price of apartments continues to increase. During the March April period, according to the Bureau of Statistics, the cost of apartments rose 0.5% from the two months before. Over the year the price of flats has risen by 1.6%. Looking at the country by regions the north saw the highest increase in prices over the year 5% followed by Jerusalem at 2.4%, Haifa at 1.8% and the South 1.2%. In Tel Aviv however, the prices of apartments actually went down by 0.1%.

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